February 21, 2013
Ohio Appellate Court Holds that Bank Lacks Standing Because It Commenced a Foreclosure Action Before Mortgage Was Assigned to Bank
In Wells Fargo Bank, N.A. v. Jordan, No. 91675, 2009 WL 625560 (Ohio Ct. App. March 12, 2009), the Ohio Court of Appeals ruled that the trial court erred in granting summary judgment, because Wells Fargo (the “Bank”) was not the real party in interest on the date it filed its complaint for foreclosure.
In 2003, mortgagor executed a note and mortgage with Delta Funding Corporation. In 2007, mortgagor defaulted on the loan, and the Bank filed a complaint for judgment, foreclosure, and relief on August 3, 2007. On August 22, 2007, the mortgage was assigned to the Bank. The trial court granted the Bank’s motion for summary judgment and motion to dismiss. Mortgagor appealed.
This court reversed and remanded the trial court’s decision to grant summary judgment to the Bank. In doing so, the court cited Wells Fargo Bank, N.A. v. Byrd, 897 N.E.2d 722 (Ohio Ct. App. 2008), which held that “in a foreclosure action, a bank that was not the mortgagee when suit was filed cannot cure its lack of standing by subsequently obtaining an interest in the mortgage.” Here, the mortgage was not assigned to the Bank until three weeks after the Bank filed for foreclosure. Thus, the Bank did not have standing when it initiated the action.